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Pinetree Capital global portfolio strategist Marshall Auerback on falling oil and gas prices and the Chinese demand for oil.
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On all well.
And so is our next guest he says that the drop in oil prices is essentially a big tax break for America -- And beats any saying that the Federal Reserve can do to stimulate this economy.
-- outback is a global portfolio strategist at pine tree capital -- joining us now from Denver.
How much of a big how much of a big boost could this be I have got got my -- numbers and it's.
About 250.
Million dollars per day an extra disposable income.
Yes it's very significant is its you pointed out and as your previous guest pointed out.
And it's far more effective than any of these you know balance sheets -- Or gimmicks that the Federal Reserve has been deployed for the last several months Operation Twist or -- thing.
Because this is money that goes that directly into the hands of consumers.
Whereas.
The swapping bonds for reserve and indicated in a bank.
Simply is it is is reaching the Fed's balance sheet and for every borrower who benefits there's a saver -- -- so the effects -- -- more diffuse and and -- session.
What.
But on the flip side of that though and -- only Gator on answer to this.
That we're still spending about one point 25 billion dollars every day on gasoline.
And it any point in history other than like the last year when we were spending more than a billion dollars a day on gasoline it was only during that 20072008.
Recession.
-- even though we get a bit of a pullback get some more in common our pockets.
These prices are still extremely.
High and still an extreme drag on this economy -- enough.
They are -- high certainly by historic standards.
But I think in many instances.
What's important.
It's not the the price level for sake -- because consumers ultimately just -- in Europe for example.
You've had the energy prices that have been twice as high as the the US fears that -- Europe is slowing down substantially right now but it it's not because of the oil price and when I was living in the UK.
In the early 2000 site -- -- -- used cost me ninety dollars the -- to fill up my -- ended so.
You -- you get used to but I think it's it's the rate of increase which creates the sticker shock which has seen the adverse fiscal impact not so much the the level but say well.
Lord god forbid we don't drop nannies in this country for the most part and -- -- much bigger country put a lot more -- -- and Britain.
That's a lot of them on the -- these days but I don't know whether that over the play the point is though that that it's eight and I I also would say that I it wouldn't surprise me if the price went -- because -- you saw the reports last week from Bloomberg which indicated that time.
A large chunk of the buying over the last several months has come from strategic petroleum reserves China has been.
Very active in this market -- that's taken a lot of the excess supply to the markets.
And if China for whatever -- -- find you can actually see further downward pressure on oil which would actually be even more positive for the American consumer -- -- Great Zain thank you so much and speaking -- -- -- very nicely with you we're gonna talk about that comment up how one member of the Federal Reserve board says that the Fed doesn't have any bullets left -- -- --
